I took my own advice and installed Leopard on my iMac this week. I planned to erase my hard drive and do a clean install. A genius at South Coast Plaza's Apple Store told me to do an "archive and install". Archive and Install makes a copy of the system folder but saves the rest of your files as is.
The entire operation went smoothly and only took about 45 minutes. Time Machine was my main reason for getting Leopard. I found a 750 GB hard drive on sale at Fry's for $149 and am using it with Time Machine (TM).
When I plugged in the new external drive, a window popped up asking if I wanted to use the drive exclusively with Time Machine. A positive response caused the hard drive to be erased and TM to go to work. TM began to make its first copy of my existing internal hard drive. It took about two hours for TM to copy all 947,000 files over to the external drive. Once it was finished, I could begin to view versions of my internal drive that were copied once per hour. TM only copies any changes made in the previous hour.
After a couple of versions had been saved I tried deleting a digital image from my desk top. It was simple to open up TM, "go back in time" to a previous version and restore my deleted image!
Time machine is great. I now feel better about not remembering to back up my hard drive. Time Machine saves the day every time!